Is it possible to receive an order of processing prohibited imports in Vietnam?

1. Is it possible to receive an order of processing prohibited imports in Vietnam?

Article 38 of Decree 69/2018/ND-CP has the following provisions:

1. A trader may receive an order of processing legal goods for a foreign trader, except for goods under the list of prohibited or suspended exports and imports.

2. In case of goods under list of lines of business under given conditions, the traders must satisfy these given conditions to receive order of outward processing.

3. In case of goods to be imported where traders are designated under authority of the State bank of Vietnam, the processing of such goods is regulated by the State bank of Vietnam. 

4. In case of exported goods and imported goods requiring license, a trader may only enter into a processing contract with a foreign trader after obtaining a license issued by the Ministry of Industry and Trade.

Application and procedures for licensing:

a) The trader shall submit an application for processing license, in person, by post or online (if applicable), to the Ministry of Industry and Trade. Required application documents:

- An application for processing license, stating contents prescribed in Article 39 hereof: 1 original.

- An investment certificate or a business registration certificate: 1 copy bearing the trader's stamp.

- A certificate of eligibility for business (if any): 1 copy bearing the trader's stamp.

b) If the required documents are incomplete or invalid , the Ministry of Industry and Trade shall, within 3 working days from the date on which the application is received, notify the trader of deficiencies and allow the trader to correct the deficiencies.

c) Within 5 working days from the date on which the complete and valid application is received, the Ministry of Industry and Trade shall consult with Ministries or ministerial-level agencies.

d) Within 5 working days from the date on which the consultation request from the Ministry of Industry and Trade is received, the Ministries and ministerial-level agencies shall send a written response.

dd) Within 5 working days from the date on which written responses from the Ministry of Industry and Trade are received, the Ministry of Industry and Trade shall issue a processing license to the trader. If the application is refused, the Ministry of Industry and Trade shall provide explanation in writing.

e) If a trader obtains a certificate of eligibility to manufacture the good that a foreign trader intends to place a processing order, the Ministry of Industry and Trade shall consider issuing a license to the trader within 5 working days from the date on which the complete and valid application is received without consultation with Ministries and ministerial-level agencies as prescribed in Point c Clause 3 hereof.

g) If the trader wishes to amend the license or have the license which is lost replaced, it shall send an application for amendment or replacement and required documents to the Ministry of Industry and Trade. Within 5 working days from the date on which a complete and valid application is received, the Ministry of Industry and Trade shall issue an amended license or a duplicate license.

Thus, according to the above regulations, your business is not allowed to process goods under the list of prohibited imports into Vietnam. In addition, they are also not allowed to process goods bunder the list of prohibited export, suspended exports and imports.

2. What do contents of processing contract for foreign traders in Vietnam comprise? 

According to Article 39 of Decree 69/2018/ND-CP, the processing must be made in writing or another equivalent form as prescribed in the Law on Commerce and contain at least:

1. Name and address of the contracting parties and processor.

2. Name and quantity of processed products.

3. Price.

4. Payment period and methods of payment.

5. A list of materials to be imported and locally produced materials  (if any) for processing, quantity and value thereof; amount of required material for each finished unit, quota for consumables and material wastage rate in processing.

6. A list of machinery and equipment to be leased, borrowed or given for processing (if any) and value thereof.

7. Actions against scrap, wreckage and rules for actions against leased or borrowed machinery and equipment, and oversupplied materials  after the processing contract finishes.

8. Delivery place and time.

9. Trademarks and geographical indications.

10. The contract term.

According to this Article, processing contract for foreign traders in Vietnam include the following basic contents.

Best Regards!